United States District Court, D. Idaho
MELALEUCA, INC., an Idaho corporation, and MELALEUCA CHINA WELLNESS PRODUCTS CO., LTD. a wholly-owned subsidiary of Melaleuca, Inc., Plaintiff,
KOT NAM SHAN, an individual, and SHAKLEE CORP., a Delaware corporation, Defendants.
MEMORANDUM DECISION AND ORDER
C. Nye, Chief U.S. District Court Judge
before the Court is Defendant Shaklee Corp.'s
(“Shaklee”) Second Motion to Stay. Dkt. 116.
Having reviewed the record and briefs, the Court finds that
the facts and legal arguments are adequately presented.
Accordingly, in the interest of avoiding further delay, and
because the Court finds that the decisional process would not
be significantly aided by oral argument, the Court will
address the motion without oral argument. Dist. Idaho Loc.
Civ. R. 7.1(d)(1)(B). For the reasons outlined below, the
Court finds good cause to DENY Shaklee's Second Motion to
Stay. Dkt. 116.
factual background underlying this dispute is set forth in
the Court's prior order. Dkt. 74., at 2-8. The Court
incorporates that background by reference here. In that prior
order, the Court dismissed all of Plaintiffs Melaleuca Inc.
and Melaleuca (China) Wellness Products Co., Ltd.'s
(hereinafter referred to collectively as
“Melaleuca”) claims against Defendant Kot Nam
Shan (“Kot”) on forum non conveniens grounds.
Dkt. 74, at 21. In light of those dismissals, the Court noted
that it “still has before it two claims for tortious
interference of contract Plaintiffs asserted against Shaklee.
At this juncture, it may be appropriate to stay these claims.
However, the Court will not take such action sua
sponte.” Id. On May 17, 2018, Shaklee filed a
Motion to Stay the remaining claims pending the resolution of
Melaleuca's claims against Kot in China. The Court
granted that motion and stayed this case for 120 days. Dkt.
95, at 8. The Court lifted the stay on March 19, 2019. Dkt.
111. Shortly thereafter, Shaklee filed its Second Motion to
Stay. Dkt. 116.
Court “has broad discretion to stay proceedings as an
incident to its power to control its own docket.”
Clinton v. Jones, 520 U.S. 681, 706-707 (1997)
(citing Landis v. N. Am. Co., 299 U.S. 248, 254
(1936)). “A trial court may, with propriety, find it is
efficient for its own docket and the fairest course for the
parties to enter a stay of an action before it, pending
resolution of independent proceedings which bear upon the
case.” Leyva v. Certified Grocers of Cal.,
Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979). Determining
whether to grant a motion to stay “calls for the
exercise of judgment, which must weigh competing interests
and maintain an even balance.” Landis, 299
U.S. at 254-55. “When considering a motion to stay, the
district court should consider three factors: (1) the
potential prejudice to the non-moving parties; (2) the
hardship and inequity to the moving party if the action is
not stayed; and (3) the judicial resources that would be
saved.” In re Micron Tech., Inc. Secs. Litig.,
No. CV-06-085-S-BLW, 2009 WL 10678270, at *2 (D. Idaho Dec.
considered the above factors, as well as the nature of this
case and the related litigation in China, the Court DENIES
Shaklee's Second Motion to Stay. Dkt. 116. Since the
Court imposed the initial stay, developments have occurred in
the Chinese courts that alleviate the Court's judicial
economy concerns discussed in its prior order. See
Dkt. 95, at 6-7 (“The Court's primary concern as it
relates to this motion [to stay] is the potential waste of
time and resources involved with determining the validity of
the 2011 contracts under Chinese law.”). Shaklee's
reply in support of its Motion explains that “Mr. Kot
brought what amounts to a declaratory judgment action in
China. . . . Mr. Kot subsequently received an adverse
decision from the Chinese trial court and the Chinese
appellate court.” Dkt. 123, at 2.
reaching its decision, the Chinese trial court considered the
validity of Kot's relevant contracts with Melaleuca, and
found them valid and enforceable. See Dkt. No. 96-2,
at 6 (“[Kot's] request of confirmation that the
plaintiff is not required to perform non-compete obligations
lacks the support of facts and legal grounds, which this
court does not support.”); Id. at 7
(“[Kot] resigned from the defendant on November 15,
2017 and joined Shaklee in January 2018, which is a
competitor specified in the Non-Compete Agreement. The
plaintiff thus breached the provisions in respect of 3-month
period specified in the Non-Compete Agreement.”). The
Chinese appellate court affirmed the Chinese trial
Shaklee contends that a second stay is warranted because Kot
has requested a retrial in China. The Court disagrees. As
explained in its prior order, “the Court does not
intend for this case to perpetually linger on its
docket.” Dkt. 95, at 8. A Chinese Court has now
considered the validity of the relevant contracts governed by
Chinese law and found them valid and enforceable. A Chinese
appellate court affirmed that decision. In light of this
development, the Court deems it proper to move forward with
this case, despite Kot's request for a retrial in China.
The Court has no reason to question or doubt the decisions of
the Chinese courts and will not further delay this matter
simply because Kot disagrees with the results.
Court HEREBY ORDERS:
Shaklee's Second Motion to Stay (Dkt. 116) is DENIED.
Court will issue a separate Litigation Order which directs
the parties to submit a Joint Litigation Plan and Discovery
Plan (or separate plans if the parties cannot agree) to the
Court by a certain date. ...